TalkTalk records loss but makes fibre appointments and sells B2B unit

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TalkTalk’s renewed focus on its fixed consumer business has resulted in some short-term pain to its balance sheet, but the company is confident that its plans for full fibre rollout and the sale of part of its B2B business will allow it to thrive going forward.

After a disastrous few years that saw significant customer losses, TalkTalk acquired 192,000 customers over the past 12 months – an improvement from the 47,000 it lost last year.

There were gains in both the consumer and business division and the firm secured 93,000 additions to its fibre service. However revenue was down four per cent to £1.7 billion, while the company recorded a pre-tax loss of £73 million thanks to £119 million one-off restructuring costs.

Challenger roots

CEO Trista Harrison announced her intention to return the company to its challenger roots when she assumed the role last year.

The firm is in the process of migrating customers from its mobile virtual network operator (MVNO) to subsidised SIMs on O2, while it has also confirmed plans to sell part of its direct B2B business to Daisy Group. Around 800,000 customers will be transferred in the £175 million transaction.

“When we reset TalkTalk a year ago, we said we would focus on delivering sustained customer growth whilst radically simplifying the business. One year into the strategy, we are making good progress on both,” declared Harrison.

“Our customer base grew by 192k in FY18, underpinned by our unique propositions and our lowest ever churn. We have also made real progress in simplifying the business to focus on core, fixed connectivity.

“This will continue into FY19 with the sale of our direct B2B business, as we focus on cementing our position as the market leader in our core B2B markets, Partner and Wholesale, which represent over 80% of our B2B business and continues to grow strongly.”

TalkTalk fibre

TalkTalk has also revealed appointments at its full fibre joint venture with Infracapital. Former Telecom New Zealand CEO Paul Reynolds, who also oversaw the creation of BT Openreach as a separate company, will be chairman, while current COO of TalkTalk Charles Bligh is to become CEO.

Bligh oversaw the creation of the original joint-venture with Sky in York before TalkTalk assumed full control of the trial. It wants to bring full-fibre to three million homes and businesses, taking advantage of the attractive regulatory environment for fibre to the premise (FTTP) networks.

“We have also set out our strategy to be at the heart of Britain’s full fibre future, in partnership with Infracapital … guaranteeing our long-term position as Britain’s leading value provider of fixed connectivity,” declared Harrison.

The prospect of more fibre will be music to the ears of mobile operators who rely on faster fixed connections for network infrastructure such as small cells and masts.